Southern Calif., Northeast Top List Of Riskiest Markets

Four California markets - San Diego, San Jose, Santa Ana and Oakland - have joined Long Island, N.Y., and Boston, making the nation's short list of housing markets with the highest risk of price declines.

According to the most recent "U.S. Market Risk Index" issued by PMI Mortgage Insurance Co., Walnut Creek, Calif., these six markets feature "a greater than 50% chance of experiencing price declines," while price decline risk in 36 of the country's 50 largest housing markets follows suit.

"We are continuing to witness record-paced home price appreciation in many markets without necessary gains in income, home affordability and rent inflation," said PMI economist Marco Van Akkeren. "This is causing the current home price environment to diverge from long-term economic fundamentals, which cannot be sustained indefinitely."

The PMI U.S. Market Risk Index published quarterly by PMI, a subsidiary of The PMI Group Inc., as part of its Real Estate Trends report, has also showed that the markets more at danger of price declines are Boston with a 553 score, followed by Long Island with 540. Immediately after, in third place, is San Diego, with a score of 528, an increase of 61 points from the last quarter's score of 467.

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